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Is Biotech CEO traveling too much, not supporting key players enough?

By Karamjit Singh August 10, 2012

Nazlee says it is necessary to give him a wider perspective of things

One BioNexus CEO pulling plug on investment due to lack of support

WITH 217 BioNexus status companies, the Malaysian biotech space is not exactly sizzling with excitement. All the big agreements being announced are of international players looking to set up operations in Malaysia. The commercial success of local players is few and far between.

The revenue of BioNexus companies grew from RM382 million (US$123 million) in 2008 to RM721 million (US$233 million) in 2011. No breakdown is given between local and export revenue.

As a comparison, consider the fact that Outsource Malaysia disclosed recently that the export revenue of Malaysian outsourcing players for the first quarter of 2012 stood at US$102 million (RM318 million) while creating 2,212 new jobs.

It is not an apple-to-apple comparison as Malaysia clearly does not have as much depth in its science base as it does in technology. Which explains why in Part 1 of Digital News Asia’s interview with Malaysian Biotechnology Corporation (Biotech Corp) chief executive officer Datuk Dr Mohd Nazlee Kamal (pic), he spoke about the importance of having funding available to further spur entrepreneurs in the sector.

Which means Biotech Corp has to at least do more to support the few companies that have gotten somewhere.

But that has not been the experience of Datuk Dr Rajen M, CEO of Holista Colltech Ltd, a biotech company listed in the Australian Stock Exchange focusing in the natural products biotechnology space.

He has not been happy with the support shown to him by Biotech Corp under Nazlee’s leadership thus far.

In fact, Rajen, who has been working on locating a collagen-extracting facility in Enstek Park, Negri Sembilan, has decided to can those plans and set up in Australia instead.

“First of all, it took me a long time to meet Nazlee and after our meeting it got worse as there was no follow-up at all. I can only conclude they are not interested,” he says, upset and disappointed at the developments, or lack thereof.

In response, Nazlee says that while he is available to meet BioNexus companies and has been meeting them regularly, his time is limited and describes Rajen’s decision as “very unfortunate” but believes that it was likely also dictated by economic logic.

“If you want to process sheep skin, it is probably easier to do it in Australia, closer to the supply of the raw material.”

He also adds that, “we have put in all the necessary help [for Rajen]. I don’t know what else we can do.”

Nazlee points to the fact that Rajen is facing challenges in getting his Intellectual Property (IP) valued by banks and says Biotech Corp is working on helping the banks in Malaysia to value biotech-based IP so that our entrepreneurs can collateralize it.

“We are working for the entire industry in doing this,” he says. This challenge that biotech entrepreneurs face with funding is the reason why Biotech Corp is pushing for the establishment of a US$100-million venture fund with funds coming from the United States and private companies in Malaysia.

And this is the primary reason behind the introduction of a RM3 million (approximately US$1 million) loan to existing BioNexus companies that was just introduced on Aug 3.

Nazlee strongly feels that without the support of any funding element, be it in the form of bank loans, venture capital or government loans, the biotech sector will not be able to grow aggressively.

But there have been other complaints too, especially of Nazlee not turning up for meetings with industry players he was supposed to attend.

He acknowledges that he was supposed to be at one particular industry gathering but was called up by Minister of Science, Technology and Innovation Datuk Seri Dr Maximus Johnity Ongkili and had to rush for that.

“But there is some misunderstanding here too, as that meeting was supposed to have been run by Razif Abdul Aziz, my senior vice president.”

There have also been some grouses that Nazlee is doing too much traveling outside of Malaysia. Nazlee feels that his overseas travels have been necessary however.

“I want to understand how the industry is moving outside of Malaysia and to reflect back on how it is moving here,” he says.

In his travels he has seen how Europe was executing on its bioeconomy and hence when the 300 industry players were gathered in Malaysia to brainstorm their bioeconomy approach last year, he could better see how Malaysia could adjust its strategy.

“Really, I feel the travel helps me to understand better what to do rather than to sit here not knowing what to do. At least my reflections are of what I have seen overseas and what we can learn from that.”

And he stresses that he also makes many trips within Malaysia to meet industry players.

“You have to do both. Otherwise, I have all these problems and I won’t know what to do. For instance, visiting Gevo’s facility in Denver allowed me to understand what they are doing and to look at other opportunities for local companies to service them in the value chain,” he says.

[Gevo is a Denver, Colorado-based company specializing in the effective production of renewable hydrocarbons such as gasoline blendstocks, renewable jet fuel and renewable diesel blendstocks. It has announced setting up a wood-based biomass manufacturing plant in Kertih, Trengganu where the total investment will eventually hit US$532 million or RM1.65 billion.]

In fact, Biotech Corp is planning a market access strategy for Latin America with at least one trip to a country there.

“We have not touched base with these countries before, always targeting Europe and the United States. But we sent a team to a conference in Columbia this year and some of our BioNexus companies went along.

“Guess what? They sold all the samples of their products there. This indicates how hungry these countries are for alternative products that do not come from the United States and Europe. We [Malaysian companies] provide an alternative to them at reasonable costs and comparable quality.”

Nazlee feels such trips do help BioNexus companies by opening up new markets for them beyond Malaysia.